Friday, July 24, 2015

SPX S&P 500 60-Minute Chart 200 EMA

The SPX is above the 200 EMA on the 60-minute at 2101.17 signaling bullish markets for the hours and days ahead, however, price fell under the 200 EMA yesterday but closed above. This battle will continue today and the stakes are high. Bulls win big if the 2101 support holds; the SPX will move up to the all-time highs. Bears win big if 2101 fails; the 2080's will be targeted as a first stop lower.

The green lines show a 'W' pattern bottom (bullish), positive divergence and oversold conditions that created the bounce. The Greece resolution occurs and the bulls never looked back. The SPX jumped above the 200 EMA punching the bears in the face. For the 'W' pattern bottom, the 'W' is from 2045 to 2085, to keep the math easy, 40 points, so the 2125 level is targeted to the upside, which occurs satisfying the 'W' pattern. The red lines show the rising wedge pattern (bearish), negative divergence and overbot conditions creating the spank down from the top. Price is now attempting to bounce and S&P futures are up +5 with the Friday session set to begin in about three hours.

The indicators are positively diverged (thin green lines) supporting a bounce, however, the MACD line is weak and bleak wanting price to come back down again for a lower low after the bounce. So stocks may start the day buoyant but into lunch time may falter and perform a major test of the 200 EMA. The RSI never reached oversold levels as yet so that remains on the table. A falling wedge pattern (bullish) may be developing and an up-down jog move would print in the apex of the wedge at the 2097-ish level. After a couple hours of trading check the chart to see if positive divergence is occurring with the MACD line, or not.

Watch the 200 EMA at 2101.17 since it determines the winner going forward for the hours and days ahead. The SPX begins at 2102 giving the nod to the bulls to begin the day. The SPX 2-hour chart shows stochastics wanting to support a bounce early in the day but the RSI, MACD line, histogram and money flow are all at lower lows, weak and bleak, so in the 2-hour time frame lower lows in price are desired for at least a couple candlesticks forward which would be 4 or 5 hours out which places stocks into this afternoon's trading. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Saturday, 7/25/15: The market bears came to play yesterday slapping stocks lower. The SPX tumbles through the 200 EMA signaling bearish markets for the hours and days ahead. The bears are in good shape going forward as long as the SPX remains under the 200 EMA on the 60-minute chart at 2100.29 drifting lower; call the 2100 level the line in the sand for the 200 EMA and for the stock market for near-term trading.

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